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TMI Blog2024 (3) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income tax (Appeals) erred in confirming the validity of reopening. 2.2 The Commissioner of Income tax (Appeals) ought to have appreciated that after assessment u/s 143(3) was passed on 26.10.2008 the notice under sec 147 was issued on 8.3.2013 beyond 4 years from the end of the Assessment year without mentioning what were the particulars omitted to be furnished by the Appellant which had resulted in escapement of income and hence the reopening is without jurisdiction. 2.3 The Commissioner of Income tax (Appeals) ought to have appreciated that the Appellant had produced the entire working of the computation of relief under sec 80IA and the present reworking of deduction u/s 80IA in the reassessment is nothing but mere change of opinion of the Assessing Authority on the same set of facts and hence the reopening is without jurisdiction. 2.4 The Commissioner of Income tax (Appeals) ought to have appreciated that there were no new tangible facts which came to the notice of the Assessing officer justifying reopening of assessment and hence the reassessment is without jurisdiction 2.5 The Commissioner of Income tax (Appeals) ought to have appreciated that deduction under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 wherein it is held that excess provision Written bank is business income and eligible for 80IA deduction, As is evident, the assessee has challenged the validity of reassessment proceedings. The assessee has also challenged the quantum addition on merits. 3. The Ld. AR advanced arguments and submitted that there was no failure on the part of the assessee to disclose the required particulars of income. Further, no tangible material came into possession of Ld. AO to form an opinion of escapement of income. Therefore, the reopening was bad-in-law. The Ld. AR also advanced arguments on merits. The Ld. Sr. DR controverted the arguments of Ld. AR and supported the impugned order. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 4. The chronology of events leading to present appeal, as tabulated by Ld. AR, is as under: - SEQUENCE OF Assessment Proceedings & Outcome Order Reference Date Income Assessed Tax Assessed Remarks By ACIT 26/12/2008 17,17,02,474 6,80,13,325 Disallowances 80IA - 14,28,54,065 Other Disallowances: Payment to Allegro -50,80,150 Forex loss - Rs. 45,00,613 Travelling expenses - Rs. 40,02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d denied this deduction for Alandur Project. The Ld. AO gave effect to appellate order on 26-03- 2012 and revised tax computations against the assessee. The revenue filed further appeal before Tribunal in ITA Nos1635/Mds/2012 & ors. which got dismissed vide order dated 25-01-2017. The revenue's further appeal before Hon'ble High Court of Madras got dismissed in TCA No.196 to 201 of 2019 dated 07-03-2019 wherein Hon'ble Court held that no substantial question of law arises in the appeal. In the meanwhile, the case was reopened and notice u/s 148 was issued on 08-03-2013. The same was for the reason that the assessee claimed excess deduction u/s 80IA by including income which would not qualify for such deduction. Further, in giving effect order, income taxable u/s 115JB was omitted to be considered resulting into short levy of tax for Rs. 38.96 Lacs. An order was passed u/s 143(3) r.w.s. 147 on 11-03-2014 adding back excess deduction claimed u/s 80IA. The tax payable by the assessee was re-computed. Since the tax under normal provisions was more than tax on income u/s 115JB, tax under normal provisions was adopted. The Ld. CIT(A), vide order dated 29-02-2016, upheld the order of Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.02.2012, the total income was determined as Rs. 2,60,29,075/- and the tax payable thereon was determined as Rs. 87,61,385/- and the refund due to the assessee was arrived at Rs. 6,24,83,329/-. It was noticed that the income taxable u/s 115JB as admitted by the assessee Rs. 15,04,22,260/- was omitted to be considered. This resulted in short levy of tax by Rs. 38,96,648/-. Prima Facie, objection appears to be reasonable and need to be rectified by rectification/ re-opening of the assessment. Therefore, in order to assess such income assessee's return for AY 06- 07 needs to be reopened." The Ld. CIT(A) relied on the decision of Hon'ble Supreme Court in P.V.S. Beedies P. Ltd 237 ITR 13(SC) holding that audit note is an information for the purpose of Section 147. From the reasons recorded by the AO, it could be seen that he had examined the records and facts with reference to the audit objection and had come to prima facie reason to believe that the income had escaped assessment. Therefore, the reopening was valid. On the legal plea of merger of assessment order, Ld. CIT(A) held that Hon'ble High Court had not gone into particular items of receipt whether it was eligible for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that certain income had escaped assessment. The formation of belief should be based on tangible material. This condition, in the present case, has not been fulfilled. In the case of CIT vs. Shwing Stetter India P. Ltd. (378 ITR 380), Hon'ble High Court of Madras held that for the purpose of assumption of jurisdiction u/s 147, the AO must have reason based on materials that there has been an income escaping assessment, which warranted assumption of jurisdiction under section 147. In the absence of any such material indicating escapement of income, the proceedings would be invalid. Further, Ld. AO did not record any reason that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. When the AO had failed to record anywhere in his satisfaction or belief that the income chargeable to tax had escaped assessment on account of the failure of the assessee to disclose truly and fully all material facts necessary for assessment, the notice issued u/s 147 beyond the period of four years was wholly without jurisdiction and could not be sustained. This case law clearly supports the case of the assessee. 9. So far as the computati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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